24/7

Lawyers of Interlegal defended interests of the foreign insurance broker at the Ukrainian courts

23.02.16

Broker of a foreign insurance company filed a request to Interlegal on charging the paid insurance compensation by means of subrogation.

After studying the submitted documents, it was found out that in the process of cargo transportation by car from Germany to Ukraine by the Ukrainian carrying company cargo got partially lost. Since the cargo was insured, the consignee asserted a claim to the broker upon insurance compensation.

Having assessed all the circumstances of cargo loss, the insurance company made a decision on insurance compensation in the amount of full cost of the lost cargo. In order to confirm fulfillment of the broker’s payment obligations, the consignee issued a letter of subrogation under which it assigned to the broker all the right on property claims against the responsible person.

Since, under the Convention on the Contract for the International Carriage of Goods by Road 1956, the carrier shall bear responsibility for cargo loss during transportation, the dispute shall be settled at the territory of Ukraine.

In the process of case consideration the carrier denied completely its responsibility for cargo loss, with reference to absence of fault as one of the necessary elements of offense, and stated that it took all the necessary measures upon cargo preservation.

Experts of Interlegal prepared a detailed explanation stating that, according to international law, the carrier’s responsibility for cargo loss during the transportation shall be imperative and shall not require for evidence of all the elements of offense, including fault. Provisions of the Convention stipulate several grounds for release of the carrier from responsibility but the list of such grounds is not exhaustive.

Having assessed all the case circumstances and having taken into account explanations of the Claimant’s representatives, the court concluded that the carrier should bear responsibility and should recover the lost cargo cost in favour of the broker.

Especially interesting fact in the court proceedings was that in the process of case consideration the court took into account both the international law provisions upon the procedure of international cargo transportation by car and the current international practice upon application of provisions on subrogation.

Experts of Interlegal – Karyna Gorovaya, the lawyer, and Alexey Remeslo, the senior lawyer, worked upon the case.